David Cameron and Nick Clegg have ordered their political parties to give up a
£520,000 bequest from a spinster after confusion over whom she had intended
to receive the donation.

The Prime Minister said that the wording of Joan Edwards’s will suggested that she wanted the money to go to “benefit the nation” rather than political parties. The money will be given to the Treasury, where it will be used to help “pay down” the national debt.

Coalition battles are now rife, four years since David Cameron and Nick Clegg announced their historic partnership in 2010.

He made the comments hours after Miss Edwards’s lawyers suggested she wanted the money to go to political parties, meaning they would have been entitled to keep the donations.

The decision by the Tories and the Lib Dems to return the donations less than 24 hours after details of it were published will add to questions about why they decided to accept it in the first place.

Both parties were sent the text of the will, which included Miss Edwards’s statement that she wanted the beneficiary to be “whichever government is in office at the date of my death”.

However, Conservative and Liberal Democrat officials said on Tuesday that she wanted the money to go to “whichever party was in government”.

The details of the will led to accusations from Miss Edwards’s friends and the former head of Parliament’s standards watchdog that the parties had pocketed money intended for the benefit of the nation.

MPs last night called for other bequests to be investigated as part of a wide-ranging review of party funding. According to the Electoral Commission, since 2008 political parties have received more than £8million from a total of 200 bequests.

Paul Flynn, a Labour member of the Political and Constitutional Reform Committee, said: "People can't take risks like they did this one. It gives the impression of a bit of sly greed. I think it needs to be looked at, there could well be others."

In an attempt to stem the furore, Mr Clegg and Mr Cameron decided to give the money to the Treasury.

Shortly afterwards the executors to Miss Edwards’s will, the Bristol-based solicitors Davis Wood, released a statement claiming they had spoken to Miss Edwards in 2001 and she had always intended the money to go to political parties. The solicitors declined to say why her wishes were not made explicit in the will they drafted, and refused to comment on why they approached the Attorney General in an attempt to clarify the will.

Mr Cameron said: “It is a slightly confusing situation. I think when you look at the wording of the will it seems to us the intention was more to benefit the nation.

“So what we’ve done with our part of the donation is give it to the Treasury so it can help to pay down the national debt, which I think meets the spirit of what this very generous lady meant.”

The parties accepted the donation despite being sent the ambiguous wording of the will. The Treasury was also sent a letter by the executors disclosing the bequest, and raising the possibility that the Exchequer could be a beneficiary.

“The party accepted the donation in good faith on the advice of the executors and on the understanding that they had sought advice from the Treasury Solicitors and the Attorney General’s Office,” a spokesman said.

Miss Edwards, a former nurse, died aged 90 last September after a fall. Roger Dunleavy, a neighbour who knew her for over 40 years, said: “If she found out it was being spent by political parties on things like pamphlets, leaflets and campaigns, then she would not be happy.”